Brazil to probe Oi-Portugal Telecom merger, Valor says
BRASILIA Feb 2 (Reuters) - Brazil's securities industry watchdog is poised to launch an investigation into Oi SA's acquisition of Portugal Telecom SGPS SA, on suspicion that key shareholders in both companies were aware of irregularities surrounding the deal, newspaper Valor Econômico said on Tuesday.
The watchdog, known as CVM, will look into whether Oi's and Portugal Telecom's controlling shareholders might have known ahead of time about potential losses in Portugal Telecom that ended up souring the transaction, Valor said, citing a document.
CVM will also investigate the sale of the advertising arm of IG, an Internet company controlled by six Oi shareholders, to Portugal Telecom stakeholder Ongoing, Valor reported.
The media offices of Oi and CVM did not immediately respond to emails seeking comments.
Portugal Telecom in 2014 invested nearly 900 million euros ($982 million) in commercial paper issued by bankrupt Rioforte Investimentos holding company of the Espirito Santo family, a key shareholder. Rioforte defaulted on the loans, leading to a revision of the merger terms between Portugal Telecom and Oi .
Early in 2015, an investigation into Portugal Telecom's financial investments led Portugal's prosecutor general to search the company on suspicion of fraud.
($1 = 0.9163 euros) (Writing by Alonso Soto; Editing by Lisa Von Ahn and Guillermo Parra-Bernal)
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